Culbreath v. Syndicate, No. 15574.

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtBAKER, Justice
Citation26 S.E.2d 809
PartiesCULBREATH. v. INVESTORS SYNDICATE et al.
Decision Date26 August 1943
Docket NumberNo. 15574.

26 S.E.2d 809

CULBREATH.
v.
INVESTORS SYNDICATE et al.

No. 15574.

Supreme Court of South Carolina.

Aug. 26, 1943.


[26 S.E.2d 810]

Appeal from Common Pleas Circuit Court, of Aiken County; G. B. Greene, Judge.

Action by Dr. Paul H. Culbreath against Investors Syndicate and another for fraud and deceit in the sale to plaintiff of the capital stock of named defendant. From a judgment granting nonsuit as to each defendant, plaintiff appeals.

Judgment affirmed in part, and in part reversed and remanded for a new trial.

Williams & Busbee, of Aiken, for appellant.

Hendersons & Salley, of Aiken, for respondents.

BAKER, Justice.

The appellant brought this action against the respondents, Investors Syndicate and King Murphy, the latter a divisional manager of Investors Syndicate, for fraud and deceit in the sale of the stock of Investors Syndicate to the appellant at $40 per share. The exceptions relate to the action of the trial Judge in excluding certain testimony proffered on behalf of the appellant, and in granting motions for a nonsuit at the close of appellant's case as to each of the respondents.

The Investors Syndicate, which hereinafter will be referred to as the corporation, is chartered under the laws of Minnesota, and qualified to do business in South Carolina. Its business is that of selling so-called "installment certificates, " the principal characteristics of which are that the purchasers of the certificates pay to the corporation a stated sum of money each month over a given period of years, at the expiration of which the certificates mature for sums representing the accumulated payments plus (presumably) accrued interest at the agreed rate. Upon maturity the certificates are payable in a lump sum or in annual installments under an annuity plan therein set forth.

The respondent, King Murphy, was the manager of a district office of the corporation situate in Georgia. One, George Brown was the agent of the corporation, serving under the direction of Murphy.

Prior to the time hereinafter mentioned, the appellant had purchased or subscribed to a substantial amount of installment certificates of the corporation. These transactions were handled with Brown, who at times was accompanied by Murphy. Until a short time prior to the making of the transaction involved in the present cause, there had been no discussions with appellant about the purchase of any of the stock of the corporation, nor had either Brown or Murphy held themselves out as being authorized or employed to sell such stock.

The testimony of the appellant tended to show that early in the summer of 1938 representations were made to him by Brown about the stock of the corporation. Brown told the appellant that the stock was valuable; that the corporation was making a great deal of money; that while the stock wasn't listed on any market, it was a good investment; and that Murphy had a friend or someone he knew around Atlanta, Ga., who held some of the stock and because of illness wanted to get his money out of it. It was further stated to the appellant by Brown that if he was interested in purchasing the stock the matter might be arranged.

The appellant testified that he told Brown that he didn't know anything about the stock or its value, and that he expressed himself as preferring to confine his transactions to the purchase of the corporation's certificates. For the time being the matter was then dropped. Thereafter, according to appellant, Brown and Murphy called on

[26 S.E.2d 811]

him together. Murphy discussed the stock during that visit and perused a memorandum book, which he also exhibited to the appellant, and which he stated showed that he (Murphy) owned some of the stock and had made "an astounding profit in it." Murphy's "selling talk" led the appellant to believe that he was a man of very considerable means, and was fully advised as to the value of the stock, and was honest in his representation that he desired the appellant to purchase it because of the money the appellant could make out of it. According to the appellant, Murphy repeated the representation of Brown that the stock that was available for sale was stock that Murphy was in a position to pick up from a man who had to liquidate it, and further stated to appellant that if it were not for such a circumstance, the stock probably would not have been available for purchase.

Appellant further testified that Murphy as well as Brown stated that the stock was "by far a better investment than by putting money in the certificates" as appellant was doing.

As the result of these discussions appellant was induced to agree to purchase fifty shares of the stock at $40 a share. He paid $200 on account, giving his note for the balance.

Later in the same year the appellant asked Murphy to relieve him of the purchase to the extent of twenty-five shares. This was arranged. Appellant later asked Murphy to let him out of the purchase of the remaining twenty-five shares, but Murphy reclined to do this.

In December of the same year the appellant, needing money, sold to one, Risher, the twenty-five shares of the corporation's stock acquired by him as aforesaid, obtaining $40 a share for it. The sale was apparently effected with the aid of Brown.

About a year later Risher needed to raise some money, and the testimony tends to show that in the course of his efforts to do so he learned through certain financial channels that the value, or at least the selling value, of the stock was only a fraction of the $40 per share which he had paid the appellant for it. He thereupon took the matter up with appellant, asking that the transaction be rescinded.

The appellant testified that in selling the stock to Risher he had...

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6 practice notes
  • Moody v. Stem, No. I616.
    • United States
    • United States State Supreme Court of South Carolina
    • 30 Diciembre 1948
    ...(8) his right to rely thereon; (9) and his consequent and proximate injury." See also Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144. Obviously, the complaint in the present case does not measure up to the rule stated. It is lacking any allegations showing mo......
  • Warr v. Carolina Power & Light Co., No. 17693
    • United States
    • United States State Supreme Court of South Carolina
    • 4 Agosto 1960
    ...24 S.E. 313; Godfrey v. E. P. Burton Lumber Company, 88 S.C. 132, 70 S.E. 396. In Culbreath v. Investors Syndicate et al., 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144, it was held that the measure of damage with reference to stock is the difference between the value of the stock and the va......
  • Welch v. Whitaker, No. 0202
    • United States
    • Court of Appeals of South Carolina
    • 28 Febrero 1984
    ...61 S.E.2d 53 (1950); 31A C.J.S. Evidence § 193a at 520 (1964); Id. § 194a at 547; see Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144 (1943) (letter held to be inadmissible hearsay). We realize that the trial judge did not exclude the letter from the evidence ......
  • Trebelhorn v. Bartlett, No. 32903
    • United States
    • Supreme Court of Nebraska
    • 30 Marzo 1951
    ...145 Neb. 161, 15 N.W.2d 393; Zinn v. Ex-Cell-O Corp., 24 Cal.2d 290, 149 P.2d 177; Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144; Humphrey v. Baron, 223 Iowa 735, 273 N.W. 856; 31 C.J.S., Evidence, § 183, p. 901; 22 C.J., Evidence, § 146, p. Finally, it is e......
  • Request a trial to view additional results
6 cases
  • Moody v. Stem, No. I616.
    • United States
    • United States State Supreme Court of South Carolina
    • 30 Diciembre 1948
    ...(8) his right to rely thereon; (9) and his consequent and proximate injury." See also Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144. Obviously, the complaint in the present case does not measure up to the rule stated. It is lacking any allegations showing mo......
  • Warr v. Carolina Power & Light Co., No. 17693
    • United States
    • United States State Supreme Court of South Carolina
    • 4 Agosto 1960
    ...24 S.E. 313; Godfrey v. E. P. Burton Lumber Company, 88 S.C. 132, 70 S.E. 396. In Culbreath v. Investors Syndicate et al., 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144, it was held that the measure of damage with reference to stock is the difference between the value of the stock and the va......
  • Welch v. Whitaker, No. 0202
    • United States
    • Court of Appeals of South Carolina
    • 28 Febrero 1984
    ...61 S.E.2d 53 (1950); 31A C.J.S. Evidence § 193a at 520 (1964); Id. § 194a at 547; see Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144 (1943) (letter held to be inadmissible hearsay). We realize that the trial judge did not exclude the letter from the evidence ......
  • Trebelhorn v. Bartlett, No. 32903
    • United States
    • Supreme Court of Nebraska
    • 30 Marzo 1951
    ...145 Neb. 161, 15 N.W.2d 393; Zinn v. Ex-Cell-O Corp., 24 Cal.2d 290, 149 P.2d 177; Culbreath v. Investors Syndicate, 203 S.C. 213, 26 S.E.2d 809, 147 A.L.R. 1144; Humphrey v. Baron, 223 Iowa 735, 273 N.W. 856; 31 C.J.S., Evidence, § 183, p. 901; 22 C.J., Evidence, § 146, p. Finally, it is e......
  • Request a trial to view additional results

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